PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits - December 31, 1998 and
1997
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1998
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES:
Schedule I: Item 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1998
Schedule II: Item 27d - Schedule of Reportable Transactions for the Year
Ended December 31, 1998
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Portland General Holdings, Inc. Retirement
Savings Plan Benefits Administration Committee:
WE HAVE AUDITED THE ACCOMPANYING STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS OF THE PORTLAND GENERAL HOLDINGS, INC. RETIREMENT SAVINGS PLAN
(THE PLAN) AS OF DECEMBER 31, 1998 AND 1997, AND THE RELATED STATEMENT OF
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED
DECEMBER 31, 1998. THESE FINANCIAL STATEMENTS AND THE SCHEDULES REFERRED
TO BELOW ARE THE RESPONSIBILITY OF THE PLAN'S ADMINISTRATION. OUR
RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS AND
SCHEDULES BASED ON OUR AUDITS.
WE CONDUCTED OUR AUDITS IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING
STANDARDS. THOSE STANDARDS REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO
OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE
OF MATERIAL MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS,
EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL
STATEMENTS. AN AUDIT ALSO INCLUDES ASSESSING THE ACCOUNTING PRINCIPLES
USED AND SIGNIFICANT ESTIMATES MADE BY MANAGEMENT, AS WELL AS EVALUATING
THE OVERALL FINANCIAL STATEMENT PRESENTATION. WE BELIEVE THAT OUR AUDITS
PROVIDE A REASONABLE BASIS FOR OUR OPINION.
IN OUR OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY,
IN ALL MATERIAL RESPECTS, THE NET ASSETS AVAILABLE FOR BENEFITS OF THE PLAN
AS OF DECEMBER 31, 1998 AND 1997, AND THE CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998, IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
OUR AUDITS WERE PERFORMED FOR THE PURPOSE OF FORMING AN OPINION ON THE
BASIC FINANCIAL STATEMENTS TAKEN AS A WHOLE. THE SUPPLEMENTAL SCHEDULES OF
ASSETS HELD FOR INVESTMENT PURPOSES AND REPORTABLE TRANSACTIONS ARE
PRESENTED FOR THE PURPOSE OF ADDITIONAL ANALYSIS AND ARE NOT A REQUIRED
PART OF THE BASIC FINANCIAL STATEMENTS BUT ARE SUPPLEMENTARY INFORMATION
REQUIRED BY THE DEPARTMENT OF LABOR RULES AND REGULATIONS FOR REPORTING AND
DISCLOSURE UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. THE
SUPPLEMENTAL SCHEDULES HAVE BEEN SUBJECTED TO THE AUDITING PROCEDURES
APPLIED IN THE AUDITS OF THE BASIC FINANCIAL STATEMENTS AND, IN OUR
OPINION, ARE FAIRLY STATED IN ALL MATERIAL RESPECTS IN RELATION TO THE
BASIC FINANCIAL STATEMENTS TAKEN AS A WHOLE.
ARTHUR ANDERSEN LLP
Portland, Oregon,
June 16, 1999
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ASSETS:
Investments, at fair value-
Interest in PGH Investment Trust-Master
Trust $344,427,928 $311,204,568
(Note 9)
Enron common stock 120,113,253 86,228,592
Short-term investments 2,944,901 1,635,768
Loans to participants 4,788,503 4,488,342
Total investments 472,274,585 403,557,270
Receivables-
Employee contributions 268,000 426,000
Employer contributions 82,000 178,000
Accrued interest 8,621 6,086
Total receivables 358,621 610,086
NET ASSETS AVAILABLE FOR BENEFITS $472,633,206 $404,167,356
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ADDITIONS TO PLAN ASSETS:
<S> <C>
Investments income-
Interest $ 384,214
Dividends 2,008,930
Income from PGH Investment Trust-Master Trust, net 34,433,894
Net appreciation in fair value of Enron Common Stock 32,295,109
Total investment income 69,122,147
Contributions-
Employee 14,364,214
Employer 4,702,291
Total contributions 19,066,505
Total additions 88,188,652
DEDUCTIONS FROM PLAN ASSETS:
Payments for-
Investment fees 41,090
Benefits to participants 19,681,712
Total deductions 19,722,802
NET INCREASE 68,465,850
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 404,167,356
NET ASSETS AVAILABLE FOR BENEFITS, end of year $472,633,206
<FN>
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
1. GENERAL DESCRIPTION OF THE PLAN:
The following brief description of the Portland General Holdings, Inc. (PGH
or the Company) Retirement Savings Plan (the Plan) provides general
information only. Readers should refer to the Plan Prospectus and Employee
Handbook for a more complete description of the Plan's provisions.
GENERAL
The Plan first became effective October 1, 1982. On July 1, 1997, Portland
General Corporation (PGC) merged into Enron Oregon Corp. (Enron). In
conjunction with the merger, PGC, the Plan sponsor, was dissolved.
Portland General Holdings, Inc. (PGH) accepted sponsorship. The Plan
subsequently became known as the Portland General Holdings, Inc. Retirement
Savings Plan. The Plan was restated effective June 25, 1997. Upon
completion of the merger, PGC shares were converted to .9825 shares of
Enron and employer matching contributions were made in Enron stock
subsequent to the merger.
The Plan is a defined contribution plan covering substantially all
employees of PGH, Portland General Electric Company (PGE) and other
affiliates who have completed one year of service as defined by the Plan.
It is administered by the PGH Retirement Savings Plan Benefits
Administration Committee. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended.
TRUSTEES
The trustee for the Stable Assets Fund, Bond Fund, Balanced Fund, Core
Equity Fund, Aggressive Equity Fund, International Equity Fund, Loan Fund,
and Model Portfolios A-E is the Northern Trust Company (Primary Trustee).
The trustee for the Enron Common Stock Fund and the PGH nonleveraged
Employee Stock Ownership Plan (ESOP) was Wells Fargo (Secondary Trustee)
for the Plan year ending December 31, 1998. On January 2, 1999, Wells
Fargo was removed as a trustee and Northern Trust was appointed successor
trustee for the Stock Fund and ESOP.
CONTRIBUTIONS
The Plan allows participating employees to contribute up to a total of 15%
of their annual base pay (before-tax and after-tax combined). The Tax
Reform Act of 1986 limits employee before-tax contributions to $10,000 and
$9,500 for 1998 and 1997, respectively. These amounts may be adjusted
annually based upon changes in the consumer price index.
The employer matching contribution is 50% of the first 6% of a
nonbargaining participant's eligible earnings, as defined by the Plan.
Employer contributions for bargaining unit participants are made according to
negotiated contracts. The matching contribution is made entirely in whole
or fractional shares of Enron Common Stock through the PGH nonleveraged
ESOP. All shares of common stock were allocated to participants and
transferred out of the PGE leveraged ESOP during 1997 to the nonleveraged
PGH ESOP. ESOP allocations shall be valued at a price defined by the
Plan document. The PGH nonleveraged ESOP purchased shares on the open
market totaling $4,798,291 in 1998.
INVESTMENT OPTIONS
Participants are offered the option of investing in seven investment funds
and five premixed portfolios held by the PGH Investment Trust-Master Trust
(Master Trust). The premixed portfolios are comprised of various
combinations of the seven investment funds and are designed to meet various
investing needs. If a participant elects to invest in Model Portfolios A-E
described below, all their current funds (except employer matching
contributions) and future payroll deferrals must be invested in that single
portfolio. Employer matching contributions become participant directed
upon the participant reaching age 50 and having completed at least five
years of participation in the Plan. At that time, the participant may
elect once each year to transfer from his ESOP account an amount that does
not exceed the value of 25% of the shares of Enron stock credited to his
ESOP account to investment options other than employer stock.
The following is a description of the various fund options:
a. The Stable Assets Fund invests primarily in investment contracts
whose rate of interest is fixed by insurance companies. As of both
December 31, 1998 and 1997, there were six participating insurance
companies, with guaranteed investment contracts. In 1998 and 1997,
the Stable Assets fund invested in synthetic investment contracts
(Note 8). The Stable Assets Fund may invest in other stable assets
outside the insurance industry in order to diversify its holdings.
b. The Bond Fund invests in a diversified mix of fixed income
investments. The fund's assets consist primarily of Treasury bonds,
Corporate bonds, U.S. Government Agency securities, pass-through
securities, and high-yield debt securities.
c. The Balanced Fund portfolio is a combination of two funds. The
Balanced Fund targets a 60% allocation to a Common Stock Fund with the
remainder allocated to a Fixed Income Securities Fund (a bond fund).
d. The Core Equity Fund consists primarily of a diversified portfolio of
large capitalization common stocks domiciled in the United States.
e. The Aggressive Equity Fund consists primarily of a diversified
portfolio of intermediate to smaller capitalization common stocks
domiciled in the United States. In addition, this fund may also
invest in stocks of distressed companies where a turnaround is likely.
f. The International Equity Fund is a diversified portfolio issued by
companies with headquarters outside of the United States. Asset
allocation emphasizes Europe, Australia, and the Far East.
g. Model Portfolios
Portfolio A is an ultra-conservative fund with the highest
concentration in the Stable Assets and Bond Funds.
Portfolio B is a conservative fund with the highest concentration in
the Stable Assets, Bond, and Core Equity Funds.
Portfolio C is a moderate fund with a higher concentration of equities
while still maintaining a high concentration of the Stable Assets and
Bond Funds.
Portfolio D is an aggressive fund with a still higher concentration in
the Core Equity, Aggressive Equity, and International Equity Funds.
Portfolio E is an ultra-aggressive fund investing only in the Core
Equity, Aggressive Equity, and International Equity Funds.
h. Enron Common Stock Fund and ESOP
The Enron Common Stock Fund invests in Enron Common Stock. Based upon
participant contributions, dividend reinvestments, transfers, and
withdrawals, the Secondary Trustee may buy or sell shares on the open
market.
The PGH Nonleveraged ESOP invests in Enron Common Stock based upon
employer matching contributions for PGH and affiliated company
employee participants.
LOAN FUND
This fund records the issuance and repayment of loan principal and related
interest over the life of loans issued to participants. The loan program
allows active employees participating in the Plan to borrow up to one-half
the value of their account, but not more than $50,000, over a maximum term
of 60 months. Participants pay interest to their account based upon the
share secured interest rate of the Electra Credit Union. The interest rate
ranges on outstanding loans at December 31, 1998 was 5.75% to 6.00% and had
maturity dates ranging from January 1999 to December 2003.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions
and allocation of (a) the Company's matching contribution (ESOP only) and
(b) net Plan earnings. Allocations are based upon participant earnings
(eligible compensation) or account balances, as defined by the Plan. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's account. Participants are immediately
vested in their accounts.
PAYMENT OF BENEFITS
The full value of the account is payable upon termination of employment,
retirement, disability, or death. Retirees and former employees may choose
to leave all or part of the full value of the account in the Plan up to age
70-1/2. After age 70-1/2, the Internal Revenue Service (IRS) required
minimum distribution criteria must be met. No additional contributions may
be made after retirement, termination, or death. For the year ended
December 31, 1998, participant disbursements are transferred from the
employees' investment elections to the Stable Assets Fund for distribution.
Participant distributions of Enron common stock are disbursed directly from
the ESOPs and Enron Common Stock Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying financial statements are prepared on the accrual basis of
accounting.
USE OF ESTIMATES
Management makes estimates and assumptions when preparing the financial
statements in conformity with generally accepted accounting principles.
These estimates and assumptions effect the amounts reported in the
accompanying financial statements and the notes thereto. Actual results
could differ from those estimates.
INVESTMENT VALUATION
Investments are recorded at quoted market prices or at estimated fair
value. Many factors are considered in arriving at fair value. In general,
however, corporate bonds are valued based on yields currently available on
comparable securities of issuers with similar credit ratings. Investments
in certain restricted common stocks are valued at the quoted market price
of the issuer's unrestricted common stock less an appropriate discount. If
a quoted market price for unrestricted common stock of the issuer is not
available, restricted common stocks are valued at a multiple of current
earnings less an appropriate discount. The multiple chosen is consistent
with multiples of similar companies based on current market prices.
Investment contracts with insurance companies are stated at contract value
(Note 7). Participant loans are stated at cost, which approximates fair
value.
INCOME RECOGNITION
The difference in fair value from one period to the next is recognized and
included in net appreciation (depreciation) in fair value of investments in
the accompanying statement of changes in net assets available for plan
benefits. The net appreciation (depreciation) in fair value of investments
also includes realized gains and losses.
Interest income is recorded on the accrual basis and dividend income is
recorded on the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
ADMINISTRATIVE EXPENSES
The Company pays administrative fees of the Plan, including trustee,
recordkeeper and audit fees. The Master Trust pays investment management
fees, brokerage fees, commissions and other costs associated with the
administration of the Master Trust. Participants pay recordkeeper fees
associated with their loans.
3. TAX STATUS:
The IRS has determined and informed the Company by a letter dated May 23,
1995 that the Plan and related trust are designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since that date. In the opinion of the Plan's administrator, the
Plan is designed and is currently being operated in compliance with the
applicable provisions of the IRC.
4. RELATED PARTY TRANSACTIONS:
Certain Plan investments are shares in funds managed by Northern Trust
Company and Wells Fargo. Northern Trust Company and Wells Fargo are the
trustees as defined by the Plan and, therefore, these investments and
investment transactions qualify as party-in-interest transactions. As the
Plan holds common stock of Enron as an investment, these investments and
investment transactions also qualify as party-in-interest transactions.
5. RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS BY INVESTMENT OPTION:
Following are PGH Retirement Savings Plan financial statements with
investment fund option information as of December 31, 1998 and 1997, and
for the year ended December 31, 1998.
<PAGE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
LOAN STABLE BOND BALANCED CORE AGGRESSIVE INTERNATIONAL
FUND ASSETS FUND FUND FUND EQUITY FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at
fair value-
Interest in
PGH Investment
Trust-Master
Trust $ - $73,333,527 $5,818,736 $14,228,867 $97,257,671 $15,626,229 $5,582,143
Enron common stock - - - - - - -
Short-term
investments - 460,185 85,497 85,578 330,524 104,255 40,314
Loans to
participants 4,788,503 - - - - - -
------ ------- ------ ------ ------- ------ ------
Total
investments 4,788,503 73,793,712 5,904,233 14,314,445 97,588,195 15,730,484 5,622,457
Receivables-
Employee
contributions - 28,000 4,000 13,000 67,000 18,000 7,000
Employer
contributions - - - - - - -
Accrued interest - 1,755 129 223 857 281 142
------ ------- ------ ------ ------- ------ ------
Total receivables - 29,755 4,129 13,223 67,857 18,281 7,142
------ ------- ------ ------ ------- ------ ------
NET ASSETS
AVAILABLE FOR
BENEFITS $4,788,503 $73,823,467 $5,908,362 $14,327,668 $97,656,052 $15,748,765 $5,629,599
========= ========== ========= ========== ========== ========== =========
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Participant Directed
LOAN STABLE BOND BALANCED CORE AGGRESSIVE INTERNATIONAL
FUND ASSETS FUND FUND FUND EQUITY FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at
fair value-
Interest in PGH
Investment Trust-
Master Trust $ - $70,243,695 $2,789,070 $8,963,389 $73,314,440 $20,290,164 $5,174,031
Enron common
stock - - - - - - -
Short-term
investments - 97,964 22,847 34,418 133,574 106,155 53,798
Loans to
participants 4,488,342 - - - - - -
------ ------- ------ ------ ------- ------ ------
Total
investments 4,488,342 70,341,659 2,811,917 8,997,807 73,448,014 20,396,319 5,227,829
Receivables-
Employee
contributions - 55,000 2,000 13,000 80,000 31,000 9,000
Employer
contributions - - - - - - -
Accrued interest - 794 103 190 727 479 219
------ ------ ------ ------ ------ ------ ------
Total
receivables - 55,794 2,103 13,190 80,727 31,479 9,219
------ ------ ------ ------ ------ ------ ------
NET ASSETS AVAILABLE
FOR BENEFITS $4,488,342 $70,397,453 $2,814,020 $9,010,997 $73,528,741 $20,427,798 $5,237,048
========= ========== ========= ========= ========== ========== =========
</TABLE>
<PAGE>
5. RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS BY INVESTMENT OPTION
(CONTINUED):
Following are PGH Retirement Savings Plan financial statements with
investment fund option information as of December 31, 1998 and 1997, and
for the year ended December 31, 1998.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
Participant Directed
Model Portfolios
<TABLE>
<CAPTION>
A B C D E
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in
PGH Investment Trust-
Master Trust $4,944,791 $8,403,076 $37,062,811 $55,723,256 $26,446,821
Enron common stock - - - - -
Short-term
investments 31,320 45,725 155,589 304,852 190,284
Loans to
participants - - - - -
------ ------ ------ ------ -------
Total
investments 4,976,111 8,448,801 37,218,400 56,028,108 26,637,105
Receivables-
Employee
contributions 3,000 7,000 32,000 55,000 28,000
Employer
contributions - - - - -
Accrued interest 118 154 430 793 514
------ ------ ------ ------ -------
Total receivables 3,118 7,154 32,430 55,793 28,514
------ ------ ------ ------ -------
NET ASSETS
AVAILABLE FOR BENEFITS $4,979,229 $8,455,955 $37,250,830 $56,083,901 $26,665,619
========= ========= ========== ========== ==========
</TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
Participant Directed
Model Portfolios
<TABLE>
<CAPTION>
A B C D E
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH
Investment Trust-
Master Trust $2,029,058 $7,249,056 $35,125,204 $56,377,746 $29,648,715
Enron common stock - - - - -
Short-term
investments 20,239 40,518 94,594 261,033 177,599
Loans to
participants - - - - -
------ ------ ------ ------ ------
Total investments 2,049,297 7,289,574 35,219,798 56,638,779 29,826,314
Receivables-
Employee
contributions 2,000 9,000 49,000 105,000 64,000
Employer
contributions - - - - -
Accrued interest 106 173 498 1,171 636
------ ------ ------ ------ -------
Total receivables 2,106 9,173 49,498 106,171 64,636
------ ------ ------ ------ -------
NET ASSETS
AVAILABLE FOR BENEFITS $2,051,403 $7,298,747 $35,269,296 $56,744,950 $29,890,950
========= ========= ========== ========== ==========
</TABLE>
<PAGE>
5. RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS BY INVESTMENT OPTION
(CONTINUED):
Following are PGH Retirement Savings Plan financial statements with
investment fund option information as of December 31, 1998 and 1997, and
for the year ended December 31, 1998.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
Participant Directed Nonparticipant
Directed
<TABLE>
<CAPTION>
Enron
Common
STOCK FUND PGH ESOP PGH ESOP TOTAL
<S> <C> <C> <C> <C>
ASSETS:
Investment,
at fair value-
Interest in PGH
Investment Trust-
Master Trust $ - $ - $ - $344,427,928
Enron common
stock 8,547,164 9,558,000 102,008,089 120,113,253
Short-term
investments 620,941 - 489,837 2,944,901
Loans to
participants - - - 4,788,503
------------ ------------ -------------- ----------------
Total
investments 9,168,105 9,558,000 102,497,926 472,274,585
Receivables-
Employee
contributions 6,000 - - 268,000
Employer
contributions - - 82,000 82,000
Accrued interest 2,478 - 747 8,621
------------ ------------ -------------- ---------------
Total receivables 8,478 - 82,747 358,621
------------ ------------ -------------- ---------------
NET ASSETS
AVAILABLE FOR
BENEFITS $9,176,583 $9,558,000 $102,580,673 $472,633,206
========= ========= =========== ===========
</TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
Participant Directed Nonparticipant
Directed
<TABLE>
<CAPTION>
Enron
Common
STOCK FUND PGH ESOP PGH ESOP TOTAL
<S> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH
Investment Trust-
Master Trust $ - $ - $ - $311,204,568
Enron common
stock 6,546,048 5,971,000 73,711,544 86,228,592
Short-term
investments 137,566 - 455,463 1,635,768
Loans to
participants - - - 4,488,342
------------ ------------ ------------ ---------------
Total
investments 6,683,614 5,971,000 74,167,007 403,557,270
Receivables-
Employee
contributions 7,000 - - 426,000
Employer
contributions - - 178,000 178,000
Accrued
interest 380 - 610 6,086
------------ ------------ ------------- --------------
Total receivables 7,380 - 178,610 610,086
------------ ------------ ------------- ---------------
NET ASSETS
AVAILABLE FOR
BENEFITS $6,690,994 $5,971,000 $74,345,617 $404,167,356
========= ========= ========== ===========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Participant Directed
<TABLE>
<CAPTION>
LOAN STABLE BOND BALANCED CORE EQUITY AGGRESSIVE INTERNATIONAL
FUND ASSETS FUND FUND FUND FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO
PLAN ASSETS:
Investment income-
Interest $266,213 $39,240 $1,605 $ 3,249 $11,438 $6,146 $2,011
Dividends - - - - - - -
Net appreciation
in fair value of
investments - - - - - - -
Net appreciation
(depreciation)in fair
value of PGH Investment
Trust-Master
Trust, - 4,383,896 324,927 2,083,017 17,063,354 (2,156,518) 379,795
------ ------- ------ ------- ------ ------ -------
Total investment
income 266,213 4,423,136 326,532 2,086,266 17,074,792 (2,150,372) 381,806
Contributions-
Employee - 3,129,122 135,426 502,475 2,758,473 911,626 251,631
Employer - - - - - - -
------ ------- ------ ------- ------ ------ -------
Total
contributions - 3,129,122 135,426 502,475 2,758,473 911,626 251,631
------ ------- ------ ------- ------ ------ -------
Total
additions 266,213 7,552,258 461,958 2,588,741 19,833,265 (1,238,746) 633,437
DEDUCTIONS FROM
PLAN ASSETS:
Payments for-
Investment fees - - - - - (41,090) -
Benefits to
participants 33,948 (4,749,545) (39,311) (571,708) (4,237,941) (1,109,647) (256,079)
------ ------- ------ ------- ------ ------ -------
Total
deductions 33,948 (4,749,545) (39,311) (571,708) (4,237,941) (1,150,737) (256,079)
------ ------- ------ ------- ------ ------ -------
NET INCREASE
(DECREASE) 300,161 2,802,713 422,647 2,017,033 15,595,324 (2,389,483) 377,358
INTERFUND
TRANSFERS, net - 623,301 2,671,695 3,299,638 8,531,987 (2,289,550) 15,193
NET ASSETS
AVAILABLE FOR BENEFITS,
beginning of
year 4,488,342 70,397,453 2,814,020 9,010,997 73,528,741 20,427,798 5,237,048
------ ------- ------ ------- ------ ------ -------
NET ASSETS
AVAILABLE FOR BENEFITS,
end of year $4,788,503 $73,823,467 $5,908,362 $14,327,668 $97,656,052 $15,748,765 $5,629,599
========= ========== ========= ========== ========== ========== ==========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND
INFORMATION
(CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
Participant Directed
Model Portfolios
<CAPTION>
A B C D E
<S> <C> <C> <C> <C> <C>
ADDITIONS TO PLAN
ASSETS:
Investment income-
Interest $ 6,714 $ 1,983 $ 5,723 $ 11,865 $ 7,613
Dividends - - - - -
Net appreciation in
fair value of
investments - - - - -
Net appreciation
(depreciation)in
fair value of PGH
Investment Trust-
Master Trust, 280,859 748,159 3,463,357 5,165,661 2,697,387
------- ------- ------ ------ -------
Total investment
income 287,573 750,142 3,469,080 5,177,526 2,705,000
Contributions-
Employee 86,846 279,902 1,334,767 2,947,452 1,776,672
Employer - - - - -
------- ------- ------ ------ -------
Total
contributions 86,846 279,902 1,334,767 2,947,452 1,776,672
------- ------- ------- ------ -------
Total
additions 374,419 1,030,044 4,803,847 8,124,978 4,481,672
DEDUCTIONS FROM
PLAN ASSETS:
Payments for-Investment
fees - - - - -
Benefits to
participants (337,623) (691,287) (1,684,968) (2,192,818) (710,640)
------- ------- ------ ------ -------
Total
deductions (337,623) (691,287) (1,684,968) (2,192,818) (710,640)
------- ------- ------ ------ -------
NET INCREASE
(DECREASE) 36,796 338,757 3,118,879 5,932,160 3,771,032
INTERFUND
TRANSFERS, net 2,891,030 818,451 (1,137,345) (6,593,209) (6,996,363)
NET ASSETS AVAILABLE
FOR BENEFITS,
beginning of year 2,051,403 7,298,747 35,269,296 56,744,950 29,890,950
------- ------- ------ ------ -------
NET ASSETS AVAILABLE
FOR BENEFITS,
end of year $4,979,229 $8,455,955 $37,250,830 $56,083,901 $26,665,619
========= ========= ========== ========== ===========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND
INFORMATION
(CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Participant Nonparticipant
Directed Directed
Enron Common
STOCK FUND PGH ESOP PGH ESOP TOTAL
<S> <C> <C> <C> <C>
ADDITIONS TO PLAN ASSETS:
Investment income-
Interest $ 11,637 $ - $ 8,777 $ 384,214
Dividends 145,829 - 1,863,101 2,008,930
Net appreciation in
fair value of
investments 2,349,569 - 29,945,540 32,295,109
Net appreciation
(depreciation)
in fair value of
PGH Investment
Trust-Master
Trust, - - - 34,433,894
---------- ----------- ----------- ----------
Total investment
income 2,507,035 - 31,817,418 69,122,147
Contributions-
Employee 249,822 - - 14,364,214
Employer - - 4,702,291 4,702,291
---------- ---------- ---------- ----------
Total
contributions 249,822 - 4,702,291 19,066,505
---------- ---------- ---------- ----------
Total
additions 2,756,857 - 36,519,709 88,188,652
DEDUCTIONS FROM PLAN ASSETS:
Payments for-
Investment fees - - - (41,090)
Benefits to
participants (317,448) - (2,816,645) (19,681,712)
---------- ---------- ---------- ----------
Total
deductions (317,448) - (2,816,645) (19,722,802)
---------- ---------- ---------- ----------
NET INCREASE
(DECREASE) 2,439,409 - 33,703,064 68,465,850
INTERFUND
TRANSFERS, net 46,180 3,587,000 (5,468,008) -
NET ASSETS
AVAILABLE FOR BENEFITS,
beginning of
year 6,690,994 5,971,000 74,345,617 404,167,356
---------- ---------- ---------- ----------
NET ASSETS
AVAILABLE FOR BENEFITS,
end of year $9,176,583 $9,558,000 $102,580,673 $472,633,206
========= ========= =========== ===========
</TABLE>
<PAGE>
6. BANK-ADMINISTERED INVESTMENTS:
The Plan's investments are held by bank-administered trust funds. The
following table presents the fair values of investments as determined by
quoted market prices. The investment contracts with insurance companies
included in the Stable Assets Fund and Model Portfolios A-E are presented
in further detail in Note 7. Investments that represent 5% or more of the
total Plan assets are separately identified.
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
------------------------- -------------------------
Number of Number of
Shares or Shares or
INVESTMENTS AT FAIR UNITS FAIR VALUE UNITS FAIR VALUE
VALUE
<S> <C> <C> <C> <C>
Enron common stock 2,104,942 $120,113,253 2,074,648 $ 86,228,592
Master Trust 19,599,472 344,427,928 19,699,108 311,204,568
Other 7,733,404 6,124,110
----------- -----------
Total investments at fair
value $472,274,585 $403,557,270
=========== ===========
</TABLE>
7. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES:
The Stable Assets Fund of the Master Trust invests in a diversified
portfolio of guaranteed investment contracts (GICs) issued by major U.S.
and Canadian life insurance companies.
The estimated fair value of all GICs at December 31, 1998 and 1997 was
approximately $38,273,456 and $39,285,455, respectively. Even though the
total fair value of GICs varies from contract value, participants will only
realize the contract value since these GICs are not negotiable on an open
market.
The total fair value of the GICs was estimated using various discount rates
based upon an average maturity.
In December 1995, the Confederation Life contracts with face value totaling
$2,085,000 were assigned to a third party for $1,423,000. The proceeds
plus approximately $2 million in cash were used to purchase a three year,
separate account GIC with Pacific Mutual. The loss on the Confederation
Life assignment of $662,000 was deferred and realized over the three year
contract period of the Pacific Mutual contract, resulting in a net fixed
interest rate of .78%.
<PAGE>
Following are the contract values of these contracts at December 31, 1998
and 1997:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ALLSTATE LIFE GA-5926 5.66% MATURES 12/31/01 $ 8,189,791 $ 7,751,082
BUSINESSMEN'S COMPANY 1131 5.81% MATURES 3/22/99 1,001,703 4,006,194
COMMONWEALTH LIFE ADA-00757FR 6.32% MATURES
12/22/00 6,198,758 5,830,284
JOHN HANCOCK CONTRACT GAC-8553 7.12% MATURES
9/30/99 5,912,766 5,519,759
JOHN HANCOCK CONTRACT GAC-9600 4.79% MATURES
6/1/01 5,019,909 5,024,000
NEW YORK LIFE INSURANCE CO. GA-30505 6.67%
MATURES 6/30/00 5,235,066 5,235,066
PACIFIC MUTUAL SEPARATE ACCOUNT GIC G-26219
.78% MATURES 12/29/98 6,306,155 5,978,396
---------- ----------
TOTAL INVESTMENT CONTRACTS WITH INSURANCE $37,864,148 $39,344,781
COMPANIES ========== ==========
<FN>
THE TOTAL CREDITING INTEREST RATE AND AVERAGE YIELD WERE APPROXIMATELY 5.3%
IN 1998 AND 5.5% IN 1997.
</TABLE>
8. OTHER INVESTMENT CONTRACTS:
In December 1995 and 1996, the Plan allocated $10,000,000 and $10,500,000,
respectively, of the Stable Asset Fund for investment in synthetic
investment contracts. These contracts operate similarly to a guaranteed
investment contract, except that the assets are held by the Primary
Trustee. Under these contracts, the Plan has authorized Dwight Asset
Management Company (the Manager) to make investment decisions as governed
by the Management Guidelines approved by the Plan Administrator. Two
separate financially responsible third parties guarantee that plan
transactions within each of the contracts will be executed at contract
value. As of December 31, 1998 and 1997, these investments are reported at
contract value in the accompanying statement of master trust assets
with fund information totaling $38,915,933 and $37,032,690, respectively,
which approximates fair value (Note 9). The crediting interest rates for
the two contracts are reset quarterly and are a function of the Manager's
performance against an appropriate industry benchmark. In no event shall
the crediting interest rate be less than 0%. The first contract, effective
December 1995 and totaling $10,003,193, includes approximately $5 million of
shares in a fund offered by PIMCO Capital Management with the remaining
$5 million of shares in a fund offered by Lotsoff Capital. At December 31,
1998 and 1997, the crediting interest rate was 5.79% and 6.41%,
respectively. The second contract, effective December 1996 and totaling
$28,912,740, includes a portfolio of AAA rated bonds consisting
primarily of U.S. Government obligations, agency passthroughs and asset-
backed securities. At December 31, 1998, the crediting interest rate was
7.11%.
<PAGE>
9. PORTLAND GENERAL HOLDINGS, INC. INVESTMENT TRUST - MASTER TRUST:
The Master Trust invests for the benefit of the PGH Pension Plan and this
Plan. Units are purchased by these Plans based on the market value of
units in the Master Trust. Income of the Master Trust is allocated to the
Plan based on units of participation and is shown in the following
statements of changes in master trust assets with fund information.
As of December 31, 1998, the participant directed investment funds shown in
the following statements of master trust assets with fund information are
comprised of funds in those investment options and funds from the premixed
investment options, Model Portfolios A-E. The nonparticipant directed
funds represent the portion of Master Trust assets held by the PGH Pension
Plan. The following table summarizes the percentage of each participant
directed investment option relative to the Plan's portion of the Master
Trust fund balance on the following page. When these percentages are
applied to the Plan investments in the Master Trust, they approximate the
by-fund investments shown in Note 5.
<TABLE>
<CAPTION>
Stable Core Aggressive
Assets Bond Equity Equity International
INVESTMENT OPTION FUND FUND FUND FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
Stable Assets Fund 80.9% - - - -
Bond Fund - 22.3% - - -
Balanced Fund - 19.4% 5.8% - -
Core Equity Fund - - 61.5% - -
Aggressive Equity Fund - - - 39.1% -
International Equity - - - - 18.9%
Fund
Portfolio A 2.2% 6.9% .4% .7% .9%
Portfolio B 2.7% 8.7% 1.2% 2.3% 3.0%
Portfolio C 8.7% 25.9% 7.4% 13.5% 18.0%
Portfolio D 5.5% 16.8% 15.2% 28.1% 37.5%
Portfolio E - - 8.5% 16.3% 21.7%
------- ------- -------- ------- -------
Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ====== ===== =====
</TABLE>
<PAGE>
STATEMENT OF MASTER TRUST ASSETS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
Retirement Savings Plan
------------------------------------------
<TABLE>
<CAPTION>
Participant Participant Participant Participant Participant
Directed Directed Directed Directed Directed
Stable Bond Core Equity Aggressive International
ASSETS FUND FUND FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and
shares in $ - $ 94,570 $154,580,905 $35,618,894 $29,524,925
registered
investment companies
Insurance contracts 37,864,148 - - - -
Preferred stock - - - 25,818 -
Convertible preferred
stock - - 445,247 - -
Corporate bonds 7,791,997 13,356,986 - - -
Corporate convertible
bonds - - - - -
U.S. Government and
agencies issues 28,489,854 11,411,946 - - -
Short-term
investments 16,139,898 901,748 2,974,882 4,294,483 491
------- ------- -------- ------- ---------
Total investments 90,285,897 25,765,250 158,001,034 39,939,195 29,525,416
Receivables-
Accrued income 386,205 379,985 107,210 37,733 3
------- ------- -------- ------- ---------
Total receivables 386,205 379,985 107,210 37,733 3
------- ------- -------- ------- ---------
Total assets $90,672,102 $26,145,235 $158,108,244 $39,976,928 $29,525,419
========== ========== =========== ========== ==========
</TABLE>
STATEMENT OF MASTER TRUST ASSETS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
Retirement Savings Plan
------------------------------------------
<TABLE>
<CAPTION>
Participant Participant Participant Participant Participant
Directed Directed Directed Directed Directed
Stable Bond Core Equity Aggressive International
ASSETS FUND FUND FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock
and shares in $ - $ 2,215 $126,768,077 $ 38,955,941 $ 28,188,237
registered
investment companies
Insurance
contracts 39,344,781 - - - -
Preferred
stock - - - - -
Convertible preferred
stock - - 222,108 - -
Corporate bonds 6,083,282 10,455,759 - - -
Corporate convertible
bonds - - - - -
U.S. Government and
agencies issues 23,826,717 10,099,081 - - -
Short-term
investments 17,610,956 630,293 3,255,181 3,899,595 90,909
------- ------- -------- ------- ---------
Total
investments 86,865,736 21,187,348 130,245,366 42,855,536 28,279,146
Receivables-
Accrued income 316,196 304,385 225,081 33,442 892,332
------- ------- -------- ------- ---------
Total receivables 316,196 304,385 225,081 33,442 892,332
------- ------- -------- ------- ---------
Total assets $87,181,932 $21,491,733 $130,470,447 $42,888,978 $29,171,478
========== ========== =========== ========== ==========
</TABLE>
<PAGE>
STATEMENT OF MASTER TRUST ASSETS WITH FUND INFORMATION
(CONTINUED)
AS OF DECEMBER 31, 1998
Pension Plan
--------------------------------------
<TABLE>
<CAPTION>
Nonparticipant Nonparticipant Nonparticipant Nonparticipant
Directed Directed Directed Directed Total
Bond Core Aggressive International Investment
FUND EQUITY FUND EQUITY FUND EQUITY FUND TRUST
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and shares
in registered $ 1,327,655 $125,572,261 $ 59,175,966 $ 14,440,273 $420,335,449
investment companies
Insurance contracts - - - - 37,864,148
Preferred stock - - 61,682 - 87,500
Convertible preferred
stock 1,116,505 458,941 - - 2,020,693
Corporate bonds 28,742,435 - - - 49,891,418
Corporate convertible
bonds 682,000 - - - 682,000
U.S. Government and
agencies issues 43,294,774 - - - 83,196,574
Short-term
investments 2,599,794 1,892,460 7,544,498 1,961 36,350,215
--------- --------- --------- -------- ---------
Total investments 77,763,163 127,923,662 66,782,146 14,442,234 630,427,997
Receivables-
Accrued income 972,063 71,688 72,155 8 2,027,050
--------- --------- --------- -------- ---------
Total receivables 972,063 71,688 72,155 8 2,027,050
--------- --------- --------- -------- ---------
Total assets $78,735,226 $127,995,350 $66,854,301 $14,442,242 $632,455,047
========== =========== ========== ========== ===========
</TABLE>
STATEMENT OF MASTER TRUST ASSETS WITH FUND INFORMATION
(CONTINUED)
AS OF DECEMBER 31, 1997
Pension Plan
--------------------------------------
<TABLE>
<CAPTION>
Nonparticipant Nonparticipant Nonparticipant Nonparticipant
Directed Directed Directed Directed Total
Bond Core Aggressive International Investment
FUND EQUITY FUND EQUITY FUND EQUITY FUND TRUST
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and
shares in $ 44,304 $116,827,316 $53,958,310 $14,574,392 $379,318,792
registered
investment companies
Insurance contracts - - - - 39,344,781
Preferred stock 1,211,544 - - - 1,211,544
Convertible preferred
stock 1,839,524 262,923 - - 2,324,555
Corporate bonds 26,734,270 - - - 43,273,311
Corporate convertible
bonds 900,000 - - - 900,000
U.S. Government and
agencies issues 47,694,143 - - - 81,619,941
Short-term
investments 1,364,068 2,696,125 5,339,009 (555,368) 34,330,768
--------- --------- --------- -------- ---------
Total
investments 79,787,853 119,786,364 59,297,319 14,019,024 582,323,692
Receivables-
Accrued income 1,154,096 223,392 45,250 555,859 3,750,033
--------- --------- --------- -------- ---------
Total
receivables 1,154,096 223,392 45,250 555,859 3,750,033
--------- --------- --------- -------- ---------
Total assets $80,941,949 $120,009,756 $59,342,569 $14,574,883 $586,073,725
========== =========== ========== ========== ===========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN MASTER TRUST ASSETS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Retirement Savings Plan
-----------------------------------------------------
Participant Participant Participant Participant Participant
Directed Directed Directed Directed Directed
Stable Bond Core Aggressive International
ASSETS FUND FUND EQUITY FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Net appreciation
(depreciation) in fair $ - $ (300,000) $ 26,847,950 $(4,191,389) $ 1,465,777
value of investments
Interest 5,659,831 1,978,431 211,569 276,894 10,020
Dividends - 569 2,040,617 120,288 1,313,116
Investment fees (157,764) (99,814) (488,626) (253,575) -
---------- ---------- ---------- ---------- -----------
Total investment
income (loss) 5,502,067 1,579,186 28,611,510 (4,047,782) 2,788,913
Transfers (to) from
other money managers
Pension plan - - - - -
Retirement
savings plan (2,011,897) 3,074,316 (973,713) 1,135,732 (2,434,972)
---------- ---------- ---------- ---------- -----------
Total funds (withdrawn)
invested (2,011,897) 3,074,316 (973,713) 1,135,732 (2,434,972)
---------- ---------- ---------- ---------- -----------
INCREASE (DECREASE)
IN NET ASSETS 3,490,170 4,653,502 27,637,797 (2,912,050) 353,941
NET ASSETS,
beginning of year 87,181,932 21,491,733 130,470,447 42,888,978 29,171,478
---------- ---------- ---------- ---------- -----------
NET ASSETS,
end of year $90,672,102 $26,145,235 $158,108,244 $39,976,928 $29,525,419
========== ========== =========== ========== ==========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN MASTER TRUST ASSETS WITH FUND INFORMATION
(CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
Pension Plan
<TABLE>
<CAPTION>
Nonparticipant Nonparticipant Nonparticipant Nonparticipant
Directed Directed Directed Directed Total
Bond Core Aggressive International Investment
FUND EQUITY FUND EQUITY FUND EQUITY FUND TRUST
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Net appreciation
(depreciation) in fair $ 562,762 $24,129,094 $(6,165,730) $(3,422,830) $38,925,634
value of investments
Interest 5,026,600 156,615 511,142 2,174 13,833,276
Dividends - 1,708,382 235,351 788,015 6,206,338
Investment fees (296,085) (268,497) (469,031) (2,033,392)
---------- ---------- ---------- ---------- -----------
Total investment
income (loss) 5,293,277 25,725,594 (5,888,268) (2,632,641) 56,931,856
Transfers (to) from
other money managers
Pension plan (7,500,000) (17,740,000) 13,400,000 2,500,000 (9,340,000)
Retirement
savings plan - - - - (1,210,534)
---------- ---------- ---------- ---------- -----------
Total funds (withdrawn)
invested (7,500,000) (17,740,000) 13,400,000 2,500,000 (10,550,534)
---------- ---------- ---------- ---------- -----------
INCREASE (DECREASE)
IN NET ASSETS (2,206,723) 7,985,594 7,511,732 (132,641) 46,381,322
NET ASSETS,
beginning of year 80,941,949 120,009,756 59,342,569 14,574,883 586,073,725
---------- ---------- ---------- ---------- -----------
NET ASSETS,
end of year $78,735,226 $127,995,350 $66,854,301 $14,442,242 $632,455,047
========== =========== ========== ========== ===========
</TABLE>
<PAGE>
ALLOCATION OF THE ASSETS OF THE MASTER TRUST TO PARTICIPATING PLANS AT
DECEMBER 31, 1998 AND 1997 ARE:
<TABLE>
<CAPTION>
1998 PERCENT 1997 PERCENT
<S> <C> <C> <C> <C>
Plan fund balance, $311,204,568 $258,615,927
beginning of year
Transfer (to) from
other money managers (1,210,534) 2,561,799
Investment income 34,433,894 50,026,842
--------------- ---------------
Plan fund balance,
end of year 344,427,928 54.46% 311,204,568 53.1%
Pension Plan fund
balance, end of year 288,027,119 45.54% 274,869,157 46.9%
--------------- ------- ------------ ------
Total $632,455,047 100.0% $586,073,725 100.0%
=========== ===== =========== ====
</TABLE>
The net appreciation (depreciation) in the fair value of investments in the
Master Trust by major investment category for the year ended December 31,
1998 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Common stock and shares in
Registered Investment Companies $38,246,941
Preferred stock (185,330)
Corporate bonds (1,864,486)
U.S. government and agency issues 2,728,509
----------
Total $38,925,634
==========
</TABLE>
10. PLAN TERMINATION:
The Company has the right under the Plan to discontinue its contributions
at any time and to terminate the Plan subject to the provisions of ERISA.
In January 1999, the Board of Directors agreed to merge the Portland
General Holdings, Inc. Retirement Savings Plan into the Enron Savings Plan.
The merger is effective July 1, 1999. On and after that date, the assets
of the Portland General Savings Plan held under the Portland General Trusts
will be transferred to the trustee of the Enron Trust under the Enron
Savings Plan.
11. RECONCILIATION TO FORM 5500:
As of December 31, 1998, the Plan had approximately $2,927,019 of pending
distributions to participants who elected to withdraw from the operation
and earnings of the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are not recorded as a liability in
the accompanying statements of net assets available for plan benefits in
accordance with generally accepted accounting principles.
The following table reconciles the financial statements to the Form 5500 as
filed by the Company for the plan year ended December 31, 1998:
<TABLE>
<CAPTION>
Net Assets
Available for Net Assets Available
Plan Benefits Benefits For Plan Benefits
1998 Paid 1997
<S> <C> <C> <C>
Per financial statements $472,633,206 $19,681,712 $404,167,356
Plus- 1998 amounts pending
distribution to
participants (2,927,019) 2,927,019 -
Less- 1997 amounts pending
paid in 1998 - (2,530,332) (2,530,332)
----------- ---------- ------------
Per Form 5500 $469,706,187 $20,078,399 $401,637,024
=========== ========== ===========
</TABLE>
<PAGE>
SCHEDULE I
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
EIN 93-0925597
PLAN NO. 003
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(Note 4)
<TABLE>
<CAPTION>
Identity of
Issue, Description of Investment,
Borrower, Including Maturity Date,
LESSOR OR RATE OF INTEREST, COLLATERAL, PAR
SIMILAR OR MATURITY VALUE Cost Current Value
PARTY
<S> <C> <C> <C>
*Northern Trust PGH Investment Trust - Master Trust $218,611,452 $344,427,928
Company (19,599,472 units)
*Enron Corp. Common Stock (2,104,942 shares) 42,069,717 120,113,253
*Northern Trust
Company COLTV Short-Term Investment Fund 1,783,625 1,783,625
(1,783,625 units)
*Wells Fargo Bank
Financial Square Prime 1,110,778 1,110,778
(1,110,778 shares)
*Northern Trust
Company Noninterest-bearing cash 50,498 50,498
*Plan
Participants Participant loans, interest rates
from 5.75% to 6.00% maturing
from 1999 to 2003 4,788,503 4,788,503
Total investments $268,414,573 $472,274,585
<FN>
*Represents a party-in-interest transaction as of December 31, 1998.
NOTE: Cost is calculated on a moving average cost basis.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE>
SCHEDULE II
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
EIN 93-0925597
PLAN NO. 003
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(Note 4)
<TABLE>
SERIES OF TRANSACTIONS OF THE SAME ISSUE THAT EXCEED 5% OF NET PLAN ASSETS AT
THE BEGINNING OF THE YEAR:
<CAPTION>
Purchases Sales
-------------- -----------------------
Identity of
PARTY Number of Purchase Number of Selling Net Gain
INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PRICE TRANSACTIONS PRICE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C>
*Northern
Trust Company COLTV Short-Term Investment
Fund (a common and collective
trust) 588 $26,657,633 188 $25,913,140 $ -
<FN>
*Represents a party-in-interest transaction for the year ended December 31,
1998.
NOTE: Net gain or (loss) is calculated using a moving average cost.
The accompanying notes are an integral part of this schedule.
</TABLE>
